Most people will make a New Year's resolution to take control of their finances, whether by formulating and committing to a budget, getting a jump on income taxes, or learning more about investment products. But while it's a great goal, it's nearly impossible to achieve without first taking a hard look at where your money went the year before.
Before tackling the ambitious goal of financial sustainability, get a sense of the areas that may have been a money pit in 2012 by conducting this five-step personal financial audit.
Nearly every professional has an association designed to help its members with job skills development, networking, and the latest industry news. These associations can be extremely valuable to professionals, students, or job seekers -- if you make use of them. But if the dues are going out every month and not much value is coming back in, it may be time to rethink that pricey membership. While company-paid association memberships have decreased along with company-paid pensions, some businesses will still assume the costs. There's no harm in asking your HR department.
If the words "I can quit anytime" are starting to sound hollow, it may be time for a financial intervention. Whether it's cigarettes, alcohol, lattes, cupcakes, or lottery tickets, the cost of a vice or addiction can wreak havoc on your bottom line. If it's just a now and then habit, put the money saved into a jar and watch it add up, with a promised reward at the end. If it's something a little more serious, get help from many of the free resources available for everything from gambling to overeating. There are even support groups for well-known coffee shops.
The old adage "you get what you pay for" may be true in some cases, but when it comes to online dating, the free sites may be just as good. If an extended (and expensive) Match.com or eHarmony membership isn't yielding any results, switch it up a bit and try Plenty of Fish or OK Cupid, or any of the dozens of demographically targeted sites for single parents, senior citizens or religiously affiliated. A different pool of candidates may yield better results, and leave enough left over to pay for a nice dinner for two.
The average monthly gym membership costs $55 -- higher in urban areas -- and who wears old sweats to yoga class? Include the costs of gym clothes, locker rental, towel rental, a personal trainer, and those up-front costs rarely yield a great return on the investment. With all the time and effort required to get in a couple reps or a half hour on the treadmill, it's no wonder that 67 percent of gym memberships go unused.
Getting in shape doesn't have to be expensive. YouTube and Hulu both have a wide array of brand-name fitness videos from certified instructors available for free viewing. A set of dumbbells, a yoga mat and some comfortable clothes will cost less than one month's membership. And with a shorter commute, working out at home might just be an easier routine to stick to.
Regular budget tracking doesn't have to be painful or expensive. Many banks offer free budgeting software that links straight to credit cards, debit cards and checking accounts. Several credit unions have partnered with FinanceWorks to allow customers to get detailed spending reports. Mint.com is a free tool available to everyone.
Taking control of your financial life doesn't have to be stressful. With a little creative thinking and a hard look at where your money went, next year's personal audit may yield some surprising surpluses.